A highly unusual TRIGGER event for a great boom …

In the early 1950s, my family formed a corporation exclusively for the purchase of natural gas properties — a sector we believed would be at the core of a future fuel revolution.

It was a major investment for us at the time. And it prospered.

But the expected fuel revolution was still many years away. So, as I explained here last week, we decided to take our profits and come back another day — a day when all the stars would be in alignment for a major new opportunity.

Before he passed away, Dad and I often talked about what kind of global event would most likely trigger the fuel revolution. But we never imagined it would happen quite the way it did.

By a strange coincidence, the trigger event occurred just last year in the country that was my primary major area of study in grad school: Japan.

And by an even stranger coincidence, the very first American eyewitness to report on the event to the global media was my own son, Anthony, who lives in Tokyo.

It was the morning of March 11.

I woke up around 4 AM Eastern Time and read the headline online in a Los Angeles Times story:

8.9 QUAKE KILLS HUNDREDS IN JAPAN

“Oh my God!” was my first thought.

“OK. The epicenter is far from Tokyo. But 8.9 on the Richter scale?! That’s catastrophic! WHERE IS ANTHONY?”

To my great surprise, the article itself gave me the exact answer just a few paragraphs later:

“Anthony Weiss, a 29-year-old from Florida studying Japanese in Tokyo, was on a train when the quake hit, shaking his passenger carriage sharply back and forward. ‘People covered their heads with their bags as dust and small debris fell,’ Weiss said. ‘Something sprung a leak, as there was a lot of water on the platform. … People were scrambling for the doorways. The aftershocks are continuing even now.'”

It turned out to be one of the most shocking disasters in modern history — the massive earthquake, the gigantic tsunami, and multiple meltdowns that struck the Fukushima Daiichi nuclear plant.

Thankfully, Anthony and his host family in Japan are fine!

And although some radioactive material was released into the atmosphere and water, their life is mostly back to normal.

But the nuclear disaster — the largest since Chernobyl — has had a dramatic impact on the country’s energy policy:

Last June, a poll of Japanese citizens conducted by Asahi Shimbun found that 74% of respondents wanted the government to ultimately decommission ALL 54 of the country’s nuclear reactors.

So in October, the Japanese government responded by proposing a dramatic long-term reduction in the nation’s reliance on nuclear power.

And already, when it comes to nuclear enrichment, Japan has virtually shut down its facilities.

The key question:

How Does the World’s Third-Largest Economy
Compensate for Such a Huge Loss of Energy?

Solar and wind power? No.

They are simply too new and too small to fill the gap. As Weiss Research’s Sean Brodrick told us last week, those technologies won’t be viable on a large scale for years or even decades.

The only solution: Natural gas.

And sure enough, in the 11 months since the Fukushima Daiichi disaster …

• Japan’s electric utilities have all switched to natural gas.

• The country has ramped up production at power plants fired by natural gas. But Japan’s domestic production is able to meet only 4% of the country’s demand!

• As a result, Japan, already the world’s largest single importer of liquid natural gas (LNG), has had to ramp up its imports even further.

Predictably, Japan’s increased demand for natural gas has driven up prices, as illustrated by this chart from the U.S. Energy Information Administration (EIA) …

Here’s the fascinating picture it paints:

Not long ago, Japan’s average import price was under $8 per million British thermal units (BTUs). Now, it has DOUBLED to $16!

By comparison, the average spot price for natural gas in the United Kingdom and continental Europe is about $12.

But even $12 is still FAR higher than the price in the U.S., where natural gas was recently hovering near the $4 level.

That’s about one-third its cost in Europe and one-FOURTH its cost in Japan!

How Long Can This Huge Discrepancy Last?

Given new technologies to more easily ship natural gas overseas, not long!

In fact, just this past Friday, natural gas prices rocketed 6.3% higher — ON TOP OF its 5.9% surge on Thursday. That’s over 12% in just 48 hours!

The main reason U.S. natural gas prices have been so low in recent years: The same reason we see such an opportunity in the fuel — its abundance.

Official estimates place the amount of technically recoverable natural gas in the United States at 482 trillion cubic feet. In 2009, the U.S. extracted 96 billion cubic meters of the fuel, overtaking Russia as the world’s largest producer. In 2010, output surged to 142 billion cubic meters. And in 2011, even further!

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Why such a huge jump in U.S. production?

Because of new technologies and techniques that allow for more effective extraction, cheaper transport, and more efficient use of natural gas.

And now, just when investors were beginning to say “natural gas will stay cheap forever,” global demand is surging … and not just in Japan!

China imported 12.2 million metric tons in 2011, worth approximately $5.8 billion, despite the fact that it’s sitting on a supply of shale reserves three times larger than that of the U.S.

You see, China hasn’t been able to match the natural gas boom in the United States because its supplies are generally deeper underground — locked up in rocks that have a higher clay content, making the fuel harder to extract.

Meanwhile, natural gas demand is rising on every continent on the planet except Antarctica.

Brazil, Argentina, India, and South Korea are stepping up imports steadily and often dramatically.

Everyone is quickly waking up to the fact that crude oil alone simply cannot meet their energy demands — and that other sources are simply NOT commercially viable.

THIS is the new fuel revolution my family first anticipated over a half century ago.

THIS is the revolution that I alerted you to right here one week ago.

And this is why we recommend you pay very close attention to the natural gas opportunities Sean Brodrick is bringing to your attention.

Good luck and God bless!

Martin

Dr. Weiss founded Weiss Research in 1971 and has dedicated the past 40 years to helping millions of average investors find truly safe havens and investments. He is president of Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. And he is the chairman of the Sound Dollar Committee, originally founded by his father in 1959 to help President Dwight D. Eisenhower balance the federal budget. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recesssion and Depression.

3. It could be a game changer if Thorium nuclear reactors gain more traction. These reactors are safer than Uranium reactors, but lost funding because of the inability to weaponise spent fuel.http://energyfromthorium.com/faq/

So with respect to your “NOT commercially viable” and “ONLY solution” statements, I would humbly disagree.

CristinaTuesday, February 21, 2012 at 5:40 pm

Dear Mr. Weiss,

You have been obsessed with having a contrarian view and have ended up disappointing a lot of people to put it very mildly. What a rally this has been and we’re not done yet.

RandalTuesday, February 28, 2012 at 12:22 pm

I don’t know how long you have been following Dr Weiss, but I have since 2001/2 and I subscribed to his paid newsletter thru to 2004 at which point I exited the markets. I will say one thing, he was pretty early in his predictions of the weak banks and especially the property bubble. He was practically shouting from his Monthly newsletter to sell your real estate and since he was based in FLORIDA he was even more adament to his subscribers there and this was 2002/3. Of course if u had sold then folks would have missed out on further property appreciation, but those who did (against the herd) are laughing or relived. I will admit he is practically a perma-bear, exremely contrarian and early with his forecast, but still worth following when one needs to balance the hype from reality.

HowardTuesday, February 21, 2012 at 10:35 pm

Hi Martin
I’ve recently learn’t that Goldman Sachs has positioned itself in the middle of this play. Like a watermellon hitting the pavement there are going to be some winners and losers. The real money will come to those less suckered who are in the know and get out before the watermellon hits. For me if Goldman Sachs are involved then that is a good reason to be weary or stay out. I’ll stick to what I know. Regards.

John StephensonWednesday, February 22, 2012 at 5:22 pm

Please read the article by aebermann on the Nat gas situation in the USA . It was published about 7 days ago in “theoildrum.com” The situation may not be as rosy as you think!

DrhotdogThursday, February 23, 2012 at 1:24 pm

LNG plants explode during fires created by earth quakes. Thorium powered nuclear plants do not melt down due to radioactive decay only happening when being bombarded by neutrons and electrons. Art Berman is going to be correct. The amount of shale gas available has been drastically over estimated. Art Berman is a geologist, Dr. Weiss is an economist who makes terrible investment calls. Brazil at the peak in the BOVESPA, deflation from the 1990s to the late 2000s, inflation as soon as deflation is the real risk, telling people to avoid the stock market after the 2009 bottom, some idiot named Bryan Rich writing weekly about the huge dollar rally coming taking the DXY index over 100 and to top it off some idiot warning about an event in April 2012 that will forever change America. I only read this site to know the ideas to avoid. Thanks again Dr. Weiss for providing me a valuable insight into what not to buy.

CristinaFriday, February 24, 2012 at 2:18 am

Yes Drhotdog, and it seems Bryan Rich has been ostracized from Weiss per this link or perhaps his safety is a concern: